Updates/rsshttp://www.hawleyrealty.com/posts/rss/posts/rssUpdates from Hawley Realtyen-usno-spam@hawleyrealty.comIndustrial Real Estate Market Report-1Q 2014http://www.hawleyrealty.com/updates/view/47http://www.hawleyrealty.com/updates/view/47Summary of Industrial Space Market for 3Q and 4Q 2013 and 1Q 2014: 10,000 to 100,000 square foot size Category.
There is a dichotomy in the Lehigh Valley Region’s industrial space market between the big box distribution facilities and the manufacturing/warehouse facilities that are under 100,000 square feet. The more functionally relevant the space, the higher the quoted lease rate. There are urban buildings that are functionally obsolete. These older buildings can be characterized with ceiling heights that are lower than 20’, shallow truck courts (less than 120’ deep), minimal sprinkler coverage capacity (not ESFR-high hazard rated), not energy efficient, irregular floor plan configuration, and limited highway access. Some of the urban buildings have been renovated to make them more functional.
Two properties that are an example of older buildings that have been modernized are: 2198 Industrial Drive, Bethlehem. This 100,000 square foot tri-tenant building was purchased in 2009 by a regional developer. The exterior was a dark grey color. The developer painted the exterior a light color, replaced the roof and improved the overall curb appeal of the building and achieved a 15-20% increase in the rental rates. The renovations and repositioning of the property in the marketplace enabled them to attract two national tenants.
Another example of an obsolete building is 2645 Mitchell Avenue, Allentown. This 270,000 square foot building had a 16’ ceiling and was on the market for sale for 4 years. The buyer capped the columns and raised the roof to a clear 30’ ceiling height. Both cities have benefitted from the modernization of the buildings and the new jobs that have resulted from the occupancy of the facilities. Older buildings that are located in the urban areas of the region offer potential for an improved tax base if they can be modernized or the land can be reclaimed for future development projects.
Several of the National Real Estate brokerage firms have prepared industrial market surveys for our region. The Cushman & Wakefield market reports that the overall size of the industrial space market is just under 57 million square feet. As of 4Q2013, the overall vacancy rate was at a 5-year low of 4.2%. This is less than half the vacancy rate that the market had just 1 year ago. The industrial space absorption rate continues to grow during the first quarter of 2014. A survey of the inventory of broker’s listings and developer’s portfolios indicates an acute lack of inventory in the 10,000 to 30,000 square foot size range as well as the space that is less than 100,000 square feet. According to web-based listing services, there are less than 20 buildings in the 25,000 to 100,000 square foot range offered for sale.
Additional industrial lease trends of note are:
1). Frequent activity from Third Party Logistics/Warehouse Service companies looking for short-term space for contract fulfillment requirements.
2). Annual escalation clauses of 2-3% in the lease rate from the base year of the term.
3). Features: Minimal office finish, deep truck courts, accessibility to highways.
4). Early Termination Clause for additional flexibility in the leasehold obligation.
In summary, the range of leasing rates for modern industrial space is $3.75 to $5.50 per square foot Net (3). Predominant features of various rental units, as reported by agents who have recently consummated leases for warehouse space are: 24’ ceiling height, 4+ truck dock doors, ESFR or high hazard rated sprinkler system, convenient highway access, 5% office space finish or less, and industrial park settings.
An interesting example as to how the degree of finish can be illustrated by the comparison of two warehouse buildings located on Brodhead Road, Lehigh Valley Industrial Park V. Another agent completed a 62,000 square foot lease for a 3PL warehouse tenant in a pre-cast concrete panel building that was built in 2006. The ceiling height is 28’ clear and there is an ESFR sprinkler system in place. We completed a lease in a 100,000 square foot warehouse lease within the past 6 months in a building that is located across the street from the 62,000 square foot rental unit. The degree of finish for this building is similar. However, the property owner was required to upgrade the sprinkler system to meet higher hazard/ESFR standards. To amortize the cost of the sprinkler upgrade, this tenant extended their lease and is paying an additional 20 cents per square foot for a base rate of $4.95 per square foot. Both buildings are located in Bethlehem Township, which has more stringent fire safety regulations than some of the other suburban townships. Many of the townships and municipalities are becoming more mindful of fire safety codes and this is starting to have an impact upon construction standard requirements. As a result, real estate agents, property owners, engineers, and commercial insurance providers will need one another to complete the due diligence process that has become a standard part of the industrial property commodity in the region.
Prepared by: Amy Hawley SIOR
Hawley Realty Inc.
April 2014
Wed, 09 Apr 2014 14:26:51 +0000ASGCO Mfg. Co.http://www.hawleyrealty.com/updates/view/46http://www.hawleyrealty.com/updates/view/46Paul Weiss sold a 28,362 square foot industrial building for $637,000 with 12.74 acres to ASGCO Manufacturing Co. This freestanding heavy industrial-use facility will be used for ASGCO’s metal fabrication operations after the planned significant renovations plans in the spring. Fri, 28 Feb 2014 10:39:50 +0000Fox Hill Road Salehttp://www.hawleyrealty.com/updates/view/45http://www.hawleyrealty.com/updates/view/45Paul Weiss sold a 10,000 square foot commercial building for $510,000 in Palmer Twp., PA. The former Moose Club on Fox Hill Road, the building was sold as an investment is being offered for lease or resale. The building is configured as a banquet hall but can be adapted to a variety of commercial uses. Fri, 28 Feb 2014 10:39:09 +0000603 8th St. Whitehall SOLDhttp://www.hawleyrealty.com/updates/view/44http://www.hawleyrealty.com/updates/view/44603 8th Street Property located next to Lehigh Valley Mall was sold to Warner Stained Glass. Paul Weiss represented the Buyer and Pat Satkovich represented the Seller for this transaction. Mr. Warner will be relocating his Stained Glass business to the site.Thu, 05 Dec 2013 12:15:29 +0000Hawley Realty Inc. sells 21,000 sq. ft. industrial building.http://www.hawleyrealty.com/updates/view/43http://www.hawleyrealty.com/updates/view/43Hawley Realty Inc. recently sold a 21,000 sq. ft. industrial building in Nazareth PA to Divine Spring Water Co., a bottled water delivery service that relocated from neighboring Lehigh County, Paul Weiss represented the Buyer and Jarrett Laubach, CCIM represented the Seller, Barb Di LLC. The selling price was $950,000.00Mon, 01 Jul 2013 13:46:17 +0000Paul Weiss facilitates sale of two buildings.http://www.hawleyrealty.com/updates/view/42http://www.hawleyrealty.com/updates/view/42Paul Weiss, Senior Associate Broker facilitated the sale of two buildings to Vision Hardware Co. of Piscataway NJ. Mr. Weiss' exclusive listing of a 70,000 sq. ft. industrial building in Easton wasa told to this company for their export and distribution business and a 10,000 sq. ft. commercial building at 2350-60 MacArthur Road Whitehall was also sold to the same company. Real acquisitions totaled $1810,000.00Mon, 01 Jul 2013 13:44:07 +0000Jarrett Laubach inks 18,500 sq. ft. dealshttp://www.hawleyrealty.com/updates/view/41http://www.hawleyrealty.com/updates/view/41Hawley Realty, Inc., an industrial and commercial real estate brokerage firm, headquartered in Allentown, Pennsylvania has recently inked 3 transactions in June by broker Jarrett Laubach CCIM, of Hawley Realty Inc. PA.
Solutionwerks Inc., an industrial engineering firm relocating from Ohio, leased 1,500 SF square feet at 1150 Glenlivet Dr., Allentown. Mr. Laubach represented BioScience Management in their lease renewal at 966 Postal Rd., Allentown. He also represented the owners of 2901 Emrick Blvd. for their 10-year lease of 6,000 SF in LVIP VI. This was the second office suite at this property leased by this broker.
Transactions totaled 18,500 square feet of space leased through Laubach’s brokerage services for an aggregate value of $1,160,000.
Mon, 01 Jul 2013 13:42:10 +0000Broad & Woodhttp://www.hawleyrealty.com/updates/view/40http://www.hawleyrealty.com/updates/view/40Jarrett Laubach leased a 5200 sq. ft. space to Studio Fitness in this 200,000 square foot adapt-and-reuse professional building.Thu, 29 Dec 2011 08:05:56 +0000900 Conroy Placehttp://www.hawleyrealty.com/updates/view/39http://www.hawleyrealty.com/updates/view/39900 Conroy Place was sold to LIG Business Holdings and leased by ParcelPort. Paul Weiss represented the Seller and Amy Hawley represented the Buyer.Thu, 29 Dec 2011 08:04:58 +00002010 Sunset Drivehttp://www.hawleyrealty.com/updates/view/38http://www.hawleyrealty.com/updates/view/38Paul Weiss leased 20,000 sq. ft. to Gooch Equipment at 2010 Sunset Drive in Fogelsville.Thu, 29 Dec 2011 08:04:11 +0000Julabo USA Grand Opening June 16, 2011http://www.hawleyrealty.com/updates/view/37http://www.hawleyrealty.com/updates/view/37Julabo USA hosted a grand opening of their newly renovated manufacturing facility at 884 Marcon Blvd. Hawley Realty, Inc. represented Julabo, a manufacturer of specialty chilling and heating units for the pharmaceutical and medical industries in Februar 2011. About 300 business professionals attended this event which was co-sponsored by the Greater Lehigh Valley Chamber of Commerce.Mon, 20 Jun 2011 07:46:31 +0000Eupen Cable leased Avenue Chttp://www.hawleyrealty.com/updates/view/36http://www.hawleyrealty.com/updates/view/36A 5 year lease was signed by Eupen Cable USA Inc. Paul Weiss negotiated the transaction.Wed, 26 Jan 2011 11:57:32 +0000I&I Consulting purchases office suite.http://www.hawleyrealty.com/updates/view/35http://www.hawleyrealty.com/updates/view/35I & I Consulting purchased an office condo at 2571 Baglyos Circle, Bethlehem, PA. Jarrett Laubach represented the seller.Wed, 26 Jan 2011 11:54:37 +0000Applied Technologies leases at Emrick Blvd.http://www.hawleyrealty.com/updates/view/34http://www.hawleyrealty.com/updates/view/34Applied Technologies leased space at 3000 Emrick Blvd. Amy Hawley represented the tenant in this transaction.Wed, 26 Jan 2011 11:52:29 +0000Max Finkelstein Inc.http://www.hawleyrealty.com/updates/view/33http://www.hawleyrealty.com/updates/view/33Max Finkelstein Inc. Tire Store leased approximately 45,000 sq. ft. in Reading, PA. Amy Hawley brokered this transaction.Wed, 26 Jan 2011 11:51:37 +0000BTC Properties by 600 Held Dr.http://www.hawleyrealty.com/updates/view/27http://www.hawleyrealty.com/updates/view/27BTC Properties purchased 600 Held Drive. Paul Weiss represented the buyer.Tue, 08 Jun 2010 10:31:53 +0000Check out our entire Property Listingshttp://www.hawleyrealty.com/updates/view/10http://www.hawleyrealty.com/updates/view/10A complete list of our properties with data sheet and Google Maps Location.Mon, 06 Jul 2009 08:00:58 +0000